G.R. No. 16371. March 28, 1961
ZAMBALES COLLEGES, INC., PETITIONER AND APPELLANT, VS. THE HON. COURT OF APPEALS, ETC., ET AL., RESPONDENTS AND APPELLEES.
REYES, J.B.L., J.:
The Zambales Colleges, Inc. filed with the Court of First Instance of
Zambales a suit for damages against Ciriaco Villanueva. In his answer
dated 2 February 1956, defendant set up a counterclaim with three
causes of action, to wit:
“FIRST CAUSE OF ACTION
12. That on February 24, 1951, plaintiff, acting thru its president,
Ricardo Aguirre, maliciously filed criminal cases Nos. 1635 and 1636 in
the Justice of the Peace Court of San Narciso, Zambales, charging him
of estafa for allegedly certifying that a certain Jose Dumlao was
qualified to teach and receive salary;* * * * * * *
“SECOND CAUSE OF ACTION
17. That on August 3, 1955, plaintiff corporation filed an action for
estafa with the Justice of the Peace Court of San Narciso, Zambales,
against the defendant based on the same facts as alleged in the
complaint;* * * * * * *
“THIRD CAUSE OF ACTION
22. That on or about August 6, 1955, after the said estafa ease
mentioned in the second cause of action was filed, plaintiff with
malice aforethought, took undue actions in the issuance and service of
the warrant of arrest by causing its representatives to hand-carry the
said warrant notwithstanding official regulations and orders against
such practice, and in so doing managed to serve said warrant or caused
to have it served shortly before noon on a Saturday when bonding
companies were closing their offices for the weekend, plaintiff (‘s)
purpose being to detain the defendant until the following Monday;23. That because of this act of the plaintiff, defendant was arrested
scandalously in the presence of his many visitors and unceremoniously
taken to police headquarters and treated like an ordinary criminal,
thus causing him damages in the amount of P10,000.00.”
On 16 February 1956, plaintiff filed a motion to dismiss the
counterclaim alleging bar by prior judgment and lack of cause of
action. Alleging that the motion to dismiss was filed out of time,
defendant moved to declare the plaintiff in default as to the
counterclaim. The trial court denied this motion for default by its
order of 23 March 1956; but, on 31 August 1956, the court also denied
plaintiff’s motion to dismiss the counterclaim. It appears that
plaintiff’s counsel was duly notified of the last denial on 1 September
1956. Because the plaintiff continued to ignore the counterclaim, on 20
March 1957, the trial court, upon defendant’s motion, finally declared
the plaintiff in default as to the counterclaim.
Evidence
having been adduced, the trial court rendered its decision dated 24
June 1958, the dispositive portion of which reads:
“In view of the foregoing considerations, the court hereby renders judgment in favor of the defendant and against the plaintiff.
1. Dismissing the plaintiff’s complaint.
2.
Ordering the plaintiff to pay to the defendant the sum of P2,500.00 as
moral damages and P1,000.00 as attorney’s fees on the first cause of
action of the latter’s counterclaim; the amount of P5,000.00 as moral
damages and P1,000.00 as attorney’s fees on the second cause of action;
and the sum of P5,000.00 as moral damages arid P1,000.00 as exemplary
damages on the third cause of action.”
Plaintiff’s appeal from this
judgment to the Court of Appeals was given due course after the
re-amended record on appeal was approved on 20 March 1959 and is now
pending decision in that Court. However, before the perfection of the
appeal and upon motion of the defendant, the trial court ordered on 15
August 1958, the execution of its decision as to defendant’s
counterclaim.
Alleging that the trial court issued the writ
of execution without or in excess of its jurisdiction, the plaintiff
filed with the Court of Appeals an original action for certiorari and
prohibition designed to set aside and annul said order. On the theory,
however, that the petitioner was not entitled to appeal on the
counterclaim, the appellate tribunal denied the petition. Hence, this
review.
Petitioner urges in this instance that respondent
trial court committed a grave abuse of discretion and/or acted in
excess of its jurisdiction in sustaining the counterclaim
notwithstanding an utter lack of evidence in support of its allegation;
that its order of declaring the petitioner (plaintiff therein) in
default and judgment by default on the counterclaim are null and void;
and, finally, that said court erred in ruling that a party in default
has no right to appeal.
There is clearly no merit in the
first contention. While an error of judgment might have been committed
by the trial judge in his evaluation of the evidence in the damage suit
(but this is just an assumption), we, nonetheless, do not find such
exercise of discretion to be whimsical, arbitrary or capricious
amounting to a virtual refusal to perform his bounden duty as a
magistrate of justice. As to the first and second causes of action, the
court, we note, took into consideration the criminal charges filed
against the defendant, the findings of the criminal courts dismissing
the same for want of substance, and testimonial evidence tending to
show the lack of merit of the criminal imputations instituted by the
plaintiff (herein petitioner), like, for instance, the absence of
deceit on the part of accused Villanueva and damage on the part of
complainant college. Coming specifically to the third cause of action,
the trial court found, among other things, that the warrant for
Villanueva’s arrest was unduly hand-carried to Manila without the
necessary indorsement of the justice of the peace court; that his
arrest was so timed that defendant could not possibly procure
immediately a bond for his provisional release, and that the warrant
was served on him at his office at the Department of Education to
unnecessarily embarrass, humiliate, and ridicule him before his
visitors and co-employees. To accept petitioner’s plea for a review of
these findings and conclusion of the court would, in effect, amount to
allowing the substitution of petitions for certiorari in lieu of
appeals, which we are not in a position to do (see Chua Ke vs. Abeto, 63 Phil., 539, and cases cited therein).
Invoking the case of Navarro and Binoya vs.
Bello, et al., 102 Phil., 1019; 54 Off. Gaz., 6588, petitioner next
argues that the declaration of default is null and void, because the
issues raised in the counterclaim, particularly those contained in the
second and third causes of action, are so inextricably linked with
those raised by the complaint, that an answer would merely require a
repleading of the complaint.
The pertinent allegations of the complaint filed by the petitioner in the Court of First Instance of Zambales read:
“2.
* * * (The defendant was, in the years from 1947 to 1950, the Director
of the Zambales Academy, Inc. (now the Zambales Colleges, Inc.) in all
its school departments, and a member of the Board of Trustees of the
same corporation from 1948 to 1950;3. * * * (The
defendant, acting fraudulently and in abuse of the trust reposed in him
as Director and member of the Board of Trustees, without the knowledge,
consent and authority of the Board of Trustees of the Zambales Academy,
Inc., and without the requisite permit and authority of the Bureau of
Private Schools, clandestinely organized and operated fake branches or
classes of the Zambales Academy Junior Normal Course in the
municipality of Castillejos, Iba and Palauig, all within the province
of Zambales, in the years from 1947 to 1950;4. * * *
(Under) the defendant’s direction, tuition and other school fees were
collected from students enrolled in this fake branches or classes,
which money collections were not delivered to the Zambales Academy,
Inc. but were appropriated to defendant’s use and purchases known to
and allowed only by himself.”
Even the
petitioner, however, does not pretend that defendant’s initial cause of
action in his counterclaim (malicious filing of criminal charges) is
related to the allegations stated in the complaint. This is but to be
expected, considering that the complaint never made the slightest
reference to the matters averred in said portion of the counterclaim
(see First Cause of Action, supra). That being the case, the
plaintiff was still obligated under the Rules of Court to controvert or
otherwise meet the new issues by filing the corresponding answer (see
Sec. 7, Rule 10, Rules of Court). The same thing may be said of the
third cause of action of the counterclaim, which only raised the
propriety of the manner how the warrant for Villanueva’s arrest was
procured by the plaintiff and served upon said defendant. No further
discourse is needed to show the already apparent disparity between the
issues posed by the first and third causes of action of the
counterclaim, on one hand, and the complaint, on the other.
Petitioner is, however, correct as to the second cause of action. The
counterclaim itself recited that this particular cause of action is
merely based on facts alleged in the complaint, and it thus had the
effect only of restating the issues already raised by the plaintiff.
Obviously, as far as this cause of action is concerned, there was no
occasion to rule the plaintiff in default.[1]
Hence, the award of damages on the counterclaim’s second cause of
action has not become final, since the case was appealed on the merits.
But this fact did not excuse the petitioner from meeting the different
issues of the first and third causes of action, and as to them, it was
properly declared in default.
Petitioner maintains that it
has not lost its standing in court and is technically not in default
because it filed a motion to dismiss the counterclaim. The records
show, however, that said motion was denied by the trial court on 31
August 1956, and movant Zambales Colleges, Inc., was duly notified of
this denial on 1 September 1956. Needless to say, a motion to dismiss
cannot be a substitute for an answer, especially when it is denied.
Not having moved for the reconsideration or for the lifting of the
order of default, petitioner itself has foreclosed its right to appeal
from the portions of the judgment which considered it in default (see Lim Toco vs. Go Fay, 80 Phil., 166; Samudio vs. Municipality of Gainza, 100 Phil., 1013; 53 Off. Gaz., 3744; Manila Motor Co., Inc. vs. San Juan, G. R. No. L-9163, May 29, 1959).
Finally, petitioner contends that it would be unconstitutional to
deprive a party of his opportunity to appeal. Suffice it to say in this
regard, however, that petitioner was not denied or deprived of that
right, but lost it due to its own fault and negligence, for which it is
exclusively to blame.
Wherefore, the judgment of the Court
of Appeals appealed from is modified in the sense that the order of
execution, dated 15 August 1959, issued by the trial court in its Civil
Case No. 1760, shall be confined only to those portions of its judgment
relating to the first and third causes of action of defendant
Villanueva’s counterclaim, to the exclusion of the P6,000.00—awarded on
the second cause of action. The writ of preliminary injunction issued
by this Court on 8 March 1960 to stay execution of judgment in said
civil case is hereby lifted, and the trial court ordered to proceed in
accordance with this opinion. No special pronouncement as to costs. So
ordered.
Bengzon, Acting C. J., Padilla, Bautista Angelo, Concepcion, Barrera, Paredes, and Dizon, JJ., concur.
[1] A declaration of default under these circumstances is a nullity (see Navarro and Binoya vs. Bello, 102 Phil., 1019; 54 Off. Gaz., 6588).